European and External Relations Committee

Meeting date: Tuesday, March 20, 2012

Official Report 509KB pdf

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“Brussels Bulletin”

Item 3 is consideration of the “Brussels Bulletin”, which Dr Ian Duncan ably puts together. Do you want to go through it before or after you sneeze?

Now I cannot sneeze.

I will not spend a great deal of time going through the bulletin, as I am sure that members have read it already. Following on from the discussions that the committee has just had, I note that there have been more developments in the euro zone, which members may want to tease out. I am not sure that there will ever be a point when there will not have been more developments in the euro zone.

I put in a good deal of information about fisheries, some of which is quite technical. That will probably be more appreciated—or more enjoyed—by the Rural Affairs, Climate Change and Environment Committee. If there are any aspects of that that the committee would like me to explore, I would be happy to do so.

We had been expecting a consultation on the common strategic framework—which relates to structural funds—but, as we heard earlier, that has now been superseded. The Commission has decided against doing that; instead, it has issued a staff working paper. That is somewhat frustrating, because we had anticipated being able to feed into that a lot of the good work that the committee has been doing. We will still be able to feed into the Commission, but not through the consultation channels that we had expected to be able to use.

I am happy to take questions on any of the other material.

I find the financial transaction tax that is mentioned on pages 2 and 3 of the bulletin extremely interesting and know that a number of MSPs are enthusiastic about it. Nine member states are keen to introduce the tax but, according to the final paragraph of the first column on page 3, although Germany wants to push forward the enhanced co-operation procedure—which, I presume, would mean that those nine states could implement the measure themselves—such a move “was seen as premature”. Was it seen as premature by the other eight member states that are keen to introduce the tax or by the EU as a whole?

I think that the Commission would like to reach consensus; indeed, that is what it is trying to push for and the move is being delayed because it is putting more effort into bringing on board some of the other member states.

Under the enhanced co-operation procedure, a smaller group moves forward and creates the structure in question and what normally happens is that, when other member states see how the measure works, they might decide to adopt it and join in. However, many countries have reservations about the detail and the general consensus is that the Commission proposal is not adequate and needs to be re-examined and improved. Some countries, including the UK and Sweden, are vehemently opposed to the measure full stop, while others are not necessarily opposed to it but are displeased with the current version and want to see greater movement on it. Rather than following the German lead of going forward right away with a smaller group, the Commission thinks that, if more work is done now, it might bring more countries into the fold. I think that there will be more movement on the issue as the negotiations and discussions take place.

In the bulletin, you say:

“In opposition stand the UK (with the most to lose from such a tax)”.

Who would lose out and how would they lose out?

Given that it receives a significant income from taxation and the actual process of deals being done in London, the UK Government would argue that there would be a flight to somewhere else if such deals were subject to this tax. In fact, when Sweden introduced it unilaterally, it discovered that people stopped doing deals in the country and moved deal making elsewhere. The UK Government is making a similar argument, but the Commission contends that the issue can be addressed if the correct procedures are in place. That is the big issue. However, Ireland’s position is very interesting. It supports the financial transaction tax, but only if it is introduced globally—which, oddly enough, is the UK’s position. The UK and Ireland seem to have a common position but to be on different sides of the argument.

I am very interested in the international public procurement proposals and think that we need to keep a watchful eye on the issue. I welcome the current proposals and the Commission is right to take this particular approach if non-EU companies seeking to bid for contracts are from countries that do not allow European firms reciprocal or mutual access. I do not know whether the committee will have the chance to feed that view back to our European parliamentarians, but I will certainly do so personally.

I am also very grateful to the clerk for keeping us informed on developments in Hungary. Again, we need to keep a watchful eye on the situation, given the democratic deficit in that country.

The Infrastructure and Capital Investment Committee is taking a very active interest in public procurement; in fact, I am in dialogue with it about some of those developments. I suspect that it will take the lead on the issue, but it will keep this committee abreast of developments.

I reassure Helen Eadie that, as the EU reporter on the Infrastructure and Capital Investment Committee, I had clocked the comments in the bulletin about public procurement. As Ian Duncan says, that committee is taking a keen interest in the issue and I am quite happy to draw the matter to its attention.

Thank you very much.

16:45

On the same point, how many of our companies are bidding overseas? What difficulties, if any, are they experiencing? If they are experiencing difficulties, how can we assist them? I am reliably informed that many overseas companies that bid for contracts in the UK are getting a lot of support from their Governments. I think that sometimes we fail our companies in that respect. We need to ensure that our companies at least have a level playing field. Can we investigate the matter—and perhaps even talk to companies—to find out whether they are having any difficulty and, if so, to see whether the Infrastructure and Capital Investment Committee can look at how they might be supported?

We can bring it to the attention of the Infrastructure and Capital Investment Committee, which will report back to us on how it intends to take the issue forward. Having spoken to that committee’s EU reporter, I think that she is prepared to receive such a request.

On page 7 of the bulletin, you say:

“The debate in Council will now be between Germany and the UK, which wants a milestone in 2020 and Poland (Romania and the Czech Republic) who do not believe that such a milestone can be met.”

What do you mean by “milestone” in that context?

A milestone is a commitment to achieve a particular emissions saving. The UK and Germany are keen to green the policy and put in place very clear targets to be achieved by that point but, in saying that it will meet the 2050 targets, Poland is in effect trying to kick the thing into the long grass. However, the view of the UK and Germany is that, if you have not met the 2020 target, how on earth are you going to meet the 2050 target. That is what is under debate. I suspect that the more difficult issue is that eastern European countries—certainly Poland, Romania and the Czech Republic—have much further to travel to meet the target.

Ninety per cent of the power stations in Poland are coal-fired.

Exactly—and therein lies the dilemma. It is very easy to assert that you must meet the milestone, but problems arise if the journey happens to be great and costly. That is why I suspect that something interesting will emerge. If these milestones are not put in place and if other member states are not bound by them, we will simply not achieve the end result by 2050. The real question is whether the member states with the furthest to travel should receive more support to reach the targets, and I suspect that that will be the point of negotiation in the short term.

I note from page 5 of the bulletin that the Commission has opened a debate on gender quotas by launching a consultation. What is the scope of that consultation?

It is a very early-stage online consultation. Recently, the Commission has tried to move to short, sharp consultations to get material in. Quotas are not popular in any area but a report commissioned by the Commission showed that the voluntary approach that had been adopted was simply not rebalancing the situation. The commissioner has given very strong hints that she would like to legislate in this area but, before she goes that far, she has introduced a consultation phase to establish other people’s views on the matter and, I suspect, to test the appetite for legislation. I have drawn the matter to the attention of the Equal Opportunities Committee, which might well take a more active interest in certain aspects.

You have both pre-empted me because I was going to raise the issue of the gender quotas and suggest that it be brought to the attention of the Equal Opportunities Committee. This move represents a very welcome step towards gender harmonisation across Europe.

Is the committee happy for the bulletin to be brought to the attention of other committees?

Members indicated agreement.

That completes today’s business. Our next meeting will start half an hour earlier at 1.30 pm to accommodate the Cabinet Secretary for Infrastructure and Capital Investment and to ensure that we maximise our time slot with him. He has other commitments that afternoon. I ask members to be here bright-eyed, bushy-tailed and all rested after recess at 1.30 pm on 17 April.

Meeting closed at 16:49.